Sandy's Effects 'Staggering' To New York's Economy

The governor of New York, Andrew Cuomo, also held a press conference yesterday, and gave a warning that Sandy could end up costing his state $33 billion in economic damage, which could worsen the state's already-perilous fiscal situation.

NPR's Jim Zarroli reports.

JIM ZARROLI, BYLINE: Cuomo said the initial estimates are that the storm will cost the region $50 billion in lost economic activity and infrastructure damage. And he said two-thirds of that will be borne by New York.

GOVERNOR ANDREW CUOMO: That is a staggering number, especially with the financial situation that we've been in.

ZARROLI: Like many states New York was left with massive fiscal problems as a result of the economic slowdown. Cuomo said yesterday that the state had closed a $10 billion budget gap over the past two years - a huge amount of money.

CUOMO: We're looking at an additional $1 billion deficit on the state side, maybe higher after what's happened.

ZARROLI: The situation is much the same in New Jersey. Tax revenues were already less than projected before the storm hit. In the aftermath of Sandy economic activity is likely to slow further, which can bring down revenues even more.

Weeks after Hurricane Katrina, Louisiana was forced to make sharp cuts in state spending, but the state received a large infusion of federal money which eventually offset the losses.

New Jersey Governor Chris Christie has said federal spending should eventually alleviate any fiscal problems his state faces as a result of the storm. Christie notes that many residents and businesses will get payouts from their insurance companies which will also help ease the state's economic pain.